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Posts: 262
Opinion: No Opinion
Posted: October 20, 2020
Tullow seeks state agreement on Turkana costs
Tullow Oil’s longstanding ambition to sell part of its stake in Kenya’s much-delayed Turkana crude project may depend on the Anglo-Irish firm agreeing state compensation for its development costs.
Kenya’s Turkana oil reserves, discovered in 2012, are estimated at 560mn bl. Tullow owns 50pc of the project, while its partners, Canada’s Africa Oil Corp. and Total, each hold 25pc.
A top Tullow executive told Petroleum Economist last year that FID would likely happen in the second half of 2020, having signed heads of terms with Kenya last June, but this year’s oil price slump has again placed the project in doubt.
In August, Tullow and its partners with withdrew a force majeure notice, declared in May, as Covid-19 restrictions eased and the government confirmed tax incentives would continue to apply.
Tullow described as “ludicrous” a Kenyan newspaper report claiming it had asked for KES204bn ($1.88bn) in compensation from Kenya’s government in lieu of exploration costs incurred from 2012 onwards.
“We have submitted our expenditure for audit ahead of cost recovery as and when production starts, but clearly we only recover our costs from production as per [the] licence,” says Tullow.
On the government response to its submission, the company says: “We are going through a process—an entirely normal process that happens in all oil producing countries—to agree what costs are covered.”
Tullow expects to reach an agreement with the Kenyan government, adding “the joint venture has spent circa $2bn in Kenya since 2011; we would look to recover a considerable part of that plus development costs as part of cost recovery. I do not know how long the audit process will take. We need a viable project first.”
Test case
These negotiations will be the first significant test for Kenya’s 2019 petroleum and energy bill as well as the authority and capacity of the fledgling energy regulator, says Edward Hobey-Hamsher, a senior analyst at consultancy Verisk Maplecroft's Africa Risk Insights team.
“If the two parties cannot agree, the base-case scenario is that Tullow seeks international arbitration, a right enshrined in the petroleum act,” he says.
“A lengthy drawn-out case would re-establish perceptions of Kenya prior to the legislative reforms as a frontier market unprepared for IOCs engaged in latter-stage exploration and production. It would also hasten the planned divestments and farm-downs of Tullow and Total, while deterring new market entrants.”
The lack of export infrastructure remains the biggest challenge to the Turkana project, according to Hobey-Hamsher, with Turkana’s oil slated to be transported from the 4.33km2 oil production and processing facility to Lamu port in northern Kenya via an 820km, $1.1bn pipeline.
The pipeline’s route and capacity has still to be agreed, and the connection is unlikely to be commissioned before 2027, consultancy Wood Mackenzie estimates. Tullow had hoped to complete it in 2023.
The company, which in its half-year results slashed the value of its Kenyan assets to $295.4mn from $1.19bn a year earlier, has suspended plans to sell a 15-20pc stake in Turkana “pending a comprehensive review … to ensure it continues to be robust at low oil prices, and also consider the strategic alternatives for the asset”. Tullow has also delayed FID.
Total to exit?
Total, which did not respond to requests for comment, has refused to commit its share of the Turkana budget for the 2020 financial year, according to Kenyan media. The French major has also threatened to quit Kenya, Africa Intelligence reports, citing a company letter to Kenya’s petroleum secretary.
“Total and Tullow want to at least farm-down their Kenyan interests, which isn’t the greatest signal,” says Conor Ward, an upstream analyst at research and consulting firm GlobalData Energy. “Total is the largest, most stable of the partners, so if they farm out completely then this project will likely face increased financing hurdles."
FID is now likely in 2022, according to both Hobey-Hamsher and Ward.
“From our valuations, this is quite a good project,” adds Ward. “If oil prices return to 2019 levels next year, they should attract some more interest from other companies.”
Posts: 262
Opinion: No Opinion
Posted: July 29, 2020
TULLOW OIL PLC
TRADING STATEMENT AND OPERATIONAL UPDATE
29 JULY 2020 - Tullow Oil plc (Tullow) issues this statement to summarise recent operational activities and to provide trading guidance in respect of the financial half year to 30 June 2020. This is in advance of the Group's Half Year Results, which are scheduled for release on Wednesday 9 September 2020. The information contained herein has not been audited and may be subject to further review and amendment.
Rahul Dhir, Chief Executive Officer, Tullow Oil plc, commented today:
"Since becoming CEO on 1 July, I have been impressed by the quality of Tullow's people and the potential of our assets and I am confident that we can build Tullow into a competitive and successful business once again. Despite the challenging external environment in the first half of the year, Tullow has performed well; delivering production in line with forecast, agreeing the sale of the Ugandan assets and re-shaping the Group's structure and cost base. In the second half of 2020 our focus will remain on continuing to deliver safe and reliable production from West Africa, reducing debt and building a cost effective and efficient organisation that can compete in a low oil price environment."
OPERATIONAL UPDATE
•
The impact of COVID-19 has been managed safely across our business with no impact on our operated production.
•
Group working interest production in the first half of 2020 averaged 77,700 bopd in line with expectations; full year guidance has been narrowed to 71,000-78,000 bopd reflecting continued good performance across the portfolio.
•
In the first half of 2020, gross Jubilee production averaged 84,700 bopd (net: 30,000 bopd), gross TEN production averaged 50,900 bopd (net: 24,000 bopd) and net production from the non-operated portfolio was 23,700 bopd.
•
Ghana operational performance has been strong in the first half with uptime on both FPSOs in excess of 95 per cent.
•
Completion operations on the Ntomme-9 production well at TEN are ongoing; the well is due onstream in August.
•
The impact of COVID-19 on the Kenya work programme and fiscal framework has led the Joint Venture to call Force Majeure on its licences which will delay FID and impact the ongoing farm-down process. Constructive discussions are ongoing with Government regarding next steps.
•
In Suriname, the drilling of the Goliathberg-Voltzberg North prospect (GVN-1) in Block 47 is planned for the first quarter of 2021. A rig is expected to be contracted shortly for this Upper Cretaceous prospect.
FINANCIAL UPDATE
•
Revenue for the first half of 2020 is expected to be c.$0.7 billion with a realised oil price of $52/bbl, including hedge receipts of $131 million.
•
At 30 June 2020, net debt is expected to be c.$3.0 billion and liquidity headroom and free cash are expected to be c.$0.5 billion; full year free cash flow is forecast to break even at the current forward curve.
•
Capital and decommissioning expenditure guidance for 2020 remains unchanged at c.$300 million (1H20: $192 million) and c.$65 million (1H20: $38 million) respectively.
•
As a result of lower near-term oil price forecasts, and a revision in the Group's long-term oil price assumption from $65/bbl to $60/bbl, the Group expects material impairment and exploration write-offs to be recorded at the half-year in the range of $1.4-1.7 billion (pre-tax).
•
At 28 July, 60 per cent of 2020 sales revenue hedged with a floor of $57/bbl, 44 per cent of 2021 sales revenue hedged with a floor of $51/bbl.
UGANDA TRANSACTION UPDATE
•
Sale of Ugandan assets for $500 million in cash on completion and $75 million in cash following FID, plus post first oil contingent payments, expected to complete before year-end.
•
Shareholder approval of the transaction confirmed at the General Meeting on 15 July with over 99 per cent of the 56 per cent votes cast in favour.
•
Transaction completion remains subject to the Government of Uganda and the Uganda Revenue Authority entering into a binding Tax Agreement that reflects the agreed tax principles and the Government of Uganda approving the transfer of Tullow's interests and Block 2 Operatorship to Total.
•
This transaction represents an important first step to raising in excess of $1 billion proceeds from portfolio management in what continues to be a challenging external environment for asset sales and farm downs.
SENIOR MANAGEMENT
•
Rahul Dhir joined Tullow as Chief Executive Officer on 1 July 2020.
•
Dorothy Thompson will resume her role as Non-Executive Chair of the Board after a short transitional period.
•
Mike Walsh has been appointed as General Counsel & Director, Risk, Compliance & IS, effective 3 August 2020, reporting to the CEO. Mike joins Tullow from Delonex Energy Limited where he was General Counsel.
PRODUCTION GUIDANCE
Group average working interest production
H1 2020 actual (bopd)
FY 2020 forecast (bopd)
Ghana
54,000
51,600
Jubilee
30,000
28,100
TEN
24,000
23,500
Equatorial Guinea
5,000
4,700
Gabon
16,800
16,700
Côte d'Ivoire
1,900
2,000
Oil production
77,700
75,000
https://www.londonstockexchange.com/news-article/TLW/trading-statement/14632422
Posts: 262
Opinion: Buy
Posted: July 15, 2020
Result of Meeting
RNS Number : 1130T
Tullow Oil PLC
15 July 2020
TULLOW OIL PLC
SHAREHOLDER APPROVAL
15 JULY 2020 - Tullow Oil plc (Tullow) announces that at its General Meeting held earlier today, the resolution set out in the Notice of General Meeting put to the General Meeting seeking approval for the proposed sale of its entire interests in Blocks 1, 1A, 2 and 3A in Uganda and the proposed East African Crude Oil Pipeline System to Total (the "Transaction"), as described in the circular to shareholders dated 18 June 2020 (the "Circular") was passed by the requisite majority. The resolution put to the General Meeting was voted on by way of a poll and the results are set out below.
The Transaction also remains subject to a number of other conditions, including customary government approvals and the execution of a binding tax agreement with the Government of Uganda and the Uganda Revenue Authority that reflects the agreed tax principles previously announced. Subject to the satisfaction of the conditions, the Transaction is expected to complete in the second half of 2020.
Votes FOR
788,781,164 99.93%
Votes AGAINST
565,765 0.07%
Notes:
(1) Proxy appointments which gave discretion to the Chair of the General Meeting have been included in the "For" total of the resolution.
(2) A "Vote Withheld" is not a vote in law and is not counted in the calculation of the proportion of votes "For" or "Against" the resolution, nor in the calculation of the proportion of "Percentage of ISC voted" for the resolution.
(3) The percentage of votes "For" and "Against" the resolution is expressed as a percentage of votes validly cast for the resolution.
(4) The number of shares in issue at 6.00 p.m. on 13 July 2020 (being the voting record date for the General Meeting) was 1,411,003,726 ordinary shares of 10 pence each (the "Ordinary Shares") and at that time, Tullow did not hold any Ordinary Shares in treasury. The proportion of "Percentage of ISC voted" for the resolution is the total of votes "For" and "Against" in respect of the resolution expressed as a percentage of the ISC as described in this note (4).
(5) In accordance with LR 9.6.2, a copy of the resolution passed at the meeting has been submitted to the FCA's National Storage Mechanism, and will shortly be available to view at https://data.fca.org.uk/#/nsm/nationalstoragemechanism. The full text of the resolution passed at the General Meeting can be found in the Notice of General Meeting forming part of the Circular, which is available for inspection at the National Storage Mechanism and also on the Company's website at http://www.tullowoil.com
Posts: 262
Opinion: Buy
Posted: July 14, 2020
Tullow Oil has announced the end of its Early Oil Pilot Scheme (EOPS) in Kenya, declaring the project to be a success.
The contract formally concluded on June 2 with just one cargo lifted. The pilot scheme involved five wells in the Amosing and Ngamia fields, in Blocks 13T and 10BB. Exports peaked at 2,000 barrels per day. Trucks moved crude by road from Turkana to Mombasa.
Kenyan crude was sold for the first time ever in mid-2019. A cargo of 240,000 barrels were lifted from the port August 26, 2019. The sale raised $13.4 million in revenues. The Celsius Riga tanker transported the crude to ChemChina.
While the EOPS scheme officially ran for two years, it was cut short. Trucking was suspended in the fourth quarter of 2019 as a result of difficult weather. At the time Tullow published its final results for the year, in March, the EOPS was still suspended.
The EOPS provided data, logistical and operational experience and training, Tullow said, which will help the project move towards full-field development.
Concrete demonstration of the impact of the EOPS came in upgrade works carried out on roads and bridges.
There were also socio-economic benefits of the work. The EOPS had given local companies an opportunity to participate in oil transportation. The work involved 30 trucks, six light vehicles and a bus. Employment went to 35 truck drivers, including a number of female drivers.
Headwinds
Tullow is working on plans to sell a stake in its Kenyan assets. The company had aimed to reach a final investment decision (FID) on the project by the end of 2020 but it is clear this is now extremely unlikely.
Tullow suspended work in Kenya in May, under a force majeure declaration.
The reserves in Turkana remain viable, Tullow said. The next steps include environment and social impact assessment (ESIA) work and project definition.
While coronavirus has had an impact on operations, Tullow has also found fault with some moves by the government. In particular, amendments to the tax law, approved in late April, moved the rate of VAT from zero for oil exploration equipment to 14%
Posts: 262
Opinion: Buy
Posted: July 6, 2020
Kenya is on the warpath with Tullow Oil over the firm’s decision to exit the country.
Members of Parliament have called for a forensic audit of the company’s books of account over questionable expenditures.
Tullow Oil is accused of using derailing tactics in the implementation of the country’s oil project as it seeks to exit the project and country, which has prompted investigations into the firm’s decision to invoke force majeure.
At the same time, legislators are questioning the $2.04 billion compensation bill the British exploration firm is demanding from the government as expenditure in the country since it discovered crude in 2012.
Despite ordering the petroleum cost recovery audit that was undertaken by audit firm Swale House Partners, the government has refused to make the report public, only maintaining that the auditors found that Tullow spent $1.6 billion while exploring oil over a six-year period.
"Parliament must scrutinise all the expenditures to ascertain they are genuine because it’s our duty to protect Kenyan taxpayers," David Gikaria, chairman of parliamentary Energy Committee, told The EastAfrican.
The woes facing Tullow, the operator of the Kenyan project on behalf of joint venture partners Total, Africa Oil and the Kenya government, have deepened after Total refused to commit its share of budget for the current financial year. Tullow is the majority shareholder in Blocks 10 BA, 10 BB and 13T in the South Lokichar Basin with a 50 per cent stake, with Africa Oil holding 25 per cent.
The EastAfrican has established that Tullow declared force majeure on the Kenyan project without consultations with the Ministry of Petroleum, and the government is seeking explanations on what informed the company’s decision.
The parliamentary energy committee is also carrying out an independent probe and has accused the company of "dishonesty" over its operations in the country including failure to explain expenditures of the recently expired Early Oil Pilot scheme and how revenues accrued from the scheme were shared.
Last week, the committee summoned Tullow Oil officials led by Kenya country manager Martin Mbogo seeking to unravel the firm’s muddled operations that are shrouded in secrecy but failed to get satisfactory answers.
"Tullow has not been honest and wants to run away from its responsibilities. Invoking force majeure throws Kenya’s project off track and only defers the country’s dreams of commercial oil exportation," said Mr Gikaria.
In May, Tullow invoked force majeure on the Kenyan project, meaning the company is unable to continue performing its contractual obligations.
Kenya’s Petroleum Ministry Principal Secretary Andrew Kamau said the government is not convinced by Tullow’s decision and has demanded a detailed report.
"We want Tullow to tell us the thinking behind it and what it means for project oil Kenya," he told The EastAfrican.
Tullow’s invocation of force majeure puts Kenya’s plans to become an oil exporting nation in limbo.
Kenya is already behind schedule for most of the milestones, including signing of the final investment decision that was slated for this year -- which now looks highly unlikely -- and securing of funding for the crude pipeline, something that further shrouds the viability of the Kenyan crude project.
It has emerged that Total’s refusal to commit more money into the Kenyan project and standoff over total expenditures is part of the reason the firm opted to put a break on the Kenyan project to avoid further expenditures at a time when its parent company is facing mounting challenges not only in Kenya but also in Ghana and Guyana.
Though Tullow’s expenditures are cost recoverable when Kenya starts commercial exportation of crude, the firm is desperately seeking a route out of Kenya through disposing its entire stake rather than commit more funds.
The company’s planned exit, however, is being complicated by a valuation of the Kenyan assets that are estimated to be worth between $1.2 billion to $2 billion.
In April the firm managed to exit Uganda after reaching an agreement with Total that saw it transfer its entire interests in Blocks 1, 1A, 2 and 3A and the proposed East African Crude Oil Pipeline at a cost of $575 million.
The deal in Uganda lifted the spirits of Tullow in a year that is has taken a severe battering due to the Covid-19 pandemic that crashed crude oil prices and resulted in the firm posting a $1.7 billion loss in the year ending March, cutting its workforce by 20 per cent and gravitating towards going bust with its share price at the London Stock Exchange on a free fall.
The firm’s share price, which nosedived to a low of 20p in April, is on a slow recovery trading at 30.6p on July 1.
Posts: 262
Opinion: Buy
Posted: July 1, 2020
Tullow Oil plc (Tullow) is pleased to announce the appointment of Rahul Dhir as Chief Executive Officer and an Executive Director of the Group. Rahul will take up his appointment from 1 July 2020 and Dorothy Thompson, currently Executive Chair of Tullow, will return to her position as Non-Executive Chair after a limited period of handover.
Rahul brings extensive leadership experience in oil and gas to Tullow. He is currently CEO of Delonex Energy, an Africa-focused oil and gas company that he founded in 2013. Under his leadership, Delonex has delivered low-cost drilling and seismic operations along with leading social and environmental performance in sub-Saharan Africa. In Chad, the company has achieved material exploration success and discovered substantial oil resources. Delonex has also delivered exploration campaigns in Ethiopia and Kenya where Delonex operates Block 12A with Tullow as a non-operating partner.
Prior to establishing Delonex, Rahul served as Managing Director and CEO of Cairn India from its IPO in 2006 until 2012. During Rahul’s tenure, Cairn India delivered operated production of over 200,000 barrels of oil per day with operating costs of less than $5 per barrel of oil. Cairn India also successfully delivered over $5 billion of development projects including the world’s longest heated pipeline at a finding and development cost of less than $5 per barrel of oil.
Rahul started his career as a Petroleum Engineer, before moving into investment banking where he led teams at Morgan Stanley and Merrill Lynch, advising major oil & gas companies on merger and acquisition and capital market related issues. Rahul is a UK citizen and was educated at the Indian Institute of Technology (BTech), the University of Texas (MSc) and the Wharton School (MBA).
Dorothy Thompson, Executive Chair of Tullow Oil Plc, commented today:
“I am delighted to welcome Rahul to Tullow and am very pleased that he has accepted the position of CEO. His oil & gas, financial and African experience combined with his record of strong leadership made him the stand-out candidate for the Board. I look forward to Rahul joining Tullow in July and working with him closely in the coming years.”
Rahul Dhir, Chief Executive Officer-designate of Tullow Oil plc, also commented today:
“I am very excited at the opportunity to lead Tullow and re-establish it as an iconic company in our industry. The company has high-quality assets and great people. It also has a unique position in Africa, built on a proven track record of responsible operations, strong relationships and a commitment to sustainability. I am looking forward to working with the team and the Board to re-build an exceptional business.”
Posts: 262
Opinion: No Opinion
Posted: April 23, 2020
RNS Number : 5704K
Tullow Oil PLC
23 April 2020
Tullow Oil plc - AGM Trading Update
23 April 2020 - Tullow Oil plc (Tullow), issues the following update ahead of its Annual General Meeting which is being held via an audio cast at 12pm today. Details of how shareholders can join the Group's AGM can be found at the end of this update and on www.tullowoil.com/AGM. This morning Tullow has issued a second press release detailing the sale of its Uganda interests to Total.
Dorothy Thompson, Executive Chair, Tullow Oil plc, commented today:
"I am very pleased with the material progress Tullow has made in the first quarter of this year given the challenges facing the Group after our performance in 2019, the COVID-19 pandemic and recent very low oil prices. This week, we have announced two significant milestones with the agreement to sell our Uganda interests to Total for $575 million in cash and the appointment of our new CEO, Rahul Dhir. The sale of our Uganda assets is an excellent first step towards our target of raising over $1 billion of proceeds to reduce net debt, strengthen the balance sheet and secure a more conservative capital structure.
"Operationally, we are delivering well against our production targets following improvements put in place by our asset team in Ghana and we have made significant changes to the structure and cost base of our organisation. Finally, the recent successful redetermination of our Reserves Based Lending facility (RBL) has underpinned Tullow's liquidity and the strength of our assets.
"I would also like to thank Steve Lucas, who retires from Tullow today at the end of the AGM. Steve has served on Tullow's Board for eight years and has provided great insight, support and expertise as a Non-Executive Director and as Chair of the Audit Committee."
Trading update
Highlights
· Sale of Uganda interests to Total for $575 million in cash announced this morning; first step in raising >$1 billion in proceeds
· Appointment of new Chief Executive Officer, Rahul Dhir, who will join Tullow from Delonex in July 2020
· Group production delivering in line with expectations in the first quarter of 2020
· Successful redetermination of RBL facility confirming headroom of c.$700 million at start of second quarter
· Thorough business review completed resulting in a smaller, more efficient organisation and reduced cost base
Operational
· Group production in the first quarter of 2020 averaged 75,800 bopd, in line with expectations; Tullow's full year guidance remains 70,000 - 80,000 bopd
· Gross production from the Jubilee field averaged 79,200 bopd (net: 28,100 bopd) in the first quarter of 2020. The field continues to perform well with improved uptime and reliable gas offtake allowing recent rates above 90,000 bopd gross
· Gross production from the TEN fields averaged 51,700 bopd (net: 24,400 bopd) in the first quarter of 2020. Work on the Ntomme-9 production well continues and the well is expected to come on stream in June
· Production from the Group's non-operated portfolio averaged 23,300 bopd in the first quarter of 2020, in line with expectations and taking into account planned shut downs at Espoir in Côte d'Ivoire and Ruche in Gabon
· In exploration, Tullow continues to pursue potential farm downs of its exploration licences to reduce equity interests ahead of drilling and further reduce costs
COVID-19
Tullow continues to manage its operations carefully in light of COVID-19 and the Group is adhering to procedures and restrictions put in place by its host countries:
· Production operations in West Africa have so far not been affected. In Ghana, Government exemptions have been made to allow charter flights for oil and gas workers into the country, enabling crew changes to occur. Tullow is then requiring all personnel to self-isolate in Ghana for two weeks before transferring to its FPSOs to ensure that the risk of a COVID-19 outbreak offshore is minimised
· In Kenya, a number of key workstreams have been suspended due to COVID-19 restrictions and while focus remains on the critical activities required for a Final Investment Decision (FID), Tullow will continue to monitor the impact these restrictions may have on the FID target
· In exploration, seismic acquisition continues in Argentina but the seismic programme in Côte d'Ivoire has been interrupted after Force Majeure was declared by the service provider in light of COVID-19 restrictions
Financial
· Tullow has agreed to sell its entire stake in the Lake Albert Development Project in Uganda to Total for $575 million in cash plus post first oil contingent payments (see separate announcement released this morning)
· Successfully completed RBL facility redetermination, confirming $1.9 billion of debt capacity and headroom of c.$700 million at start of second quarter
· Further $85 million of cash savings identified to reduce capex to c.$300 million and decommissioning spend to c.$65 million
· 60% of 2020 sales revenue hedged with a floor of c.$57/bbl and 40% of 2021 sales revenue hedged with a floor of c.$53/bbl
· First quarter 2020 realised oil price of c.$56/bbl including the benefit of c.$27 million of net hedge receipts during the period
· Completion of sale of Uganda assets will be the first step towards raising in excess of $1 billon proceeds through portfolio management; continued focus on progressing options to achieve this target
Board & Management
· Appointment of Rahul Dhir as Chief Executive Officer and an Executive Director of the Group from 1 July 2020. Rahul joins Tullow from Delonex Energy, where he was CEO of the Africa-focused oil and gas company. Prior to Delonex, Rahul served as Managing Director and CEO of Cairn India
· Steve Lucas will step down from the Board following today's AGM and Martin Greenslade will take over as Chair of the Audit Committee
Read the full RNS here...
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/TLW/14513139.html
Posts: 262
Opinion: Buy
Posted: April 23, 2020
News Release
Tullow agrees sale of its entire stake in the Lake Albert
Development Project in Uganda to Total for US$575 million in cash
plus post first oil contingent payments
23 April 2020 - Tullow Oil plc (Tullow) is pleased to announce that it has agreed the sale of its assets in Uganda to Total with an effective date of 1 January 2020.
· Cash payments of US$500 million on deal completion and US$75 million at Final Investment Decision (FID)
· Contingent payments linked to oil price to be paid after production commences
· Principles on tax treatment of the Transaction agreed with Uganda Revenue Authority (URA)
· Transaction marks first step in portfolio management programme to raise in excess of US$1 billion
· Proceeds to be used to reduce Tullow's net debt, strengthening the balance sheet and moving Tullow towards a more conservative capital structure
· Completion subject to a number of conditions, including approval by Tullow's shareholders, entering into a binding tax agreement with the Government of Uganda and the URA that reflects the agreed tax principles and customary government and other approvals; completion of the Transaction is expected in the second half of 2020
Read the full RNS here...
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/TLW/14513135.html
Posts: 262
Opinion: Buy
Posted: April 21, 2020
RNS Number : 2660K
Tullow Oil PLC
21 April 2020
News Release
Appointment of Rahul Dhir as CEO of Tullow Oil plc
21 April 2020- Tullow Oil plc (Tullow) is pleased to announce the appointment of Rahul Dhir as Chief Executive Officer and an Executive Director of the Group. Rahul will take up his appointment from 1 July 2020 and Dorothy Thompson, currently Executive Chair of Tullow, will return to her position as Non-Executive Chair after a limited period of handover.
Rahul brings extensive leadership experience in oil and gas to Tullow. He is currently CEO of Delonex Energy, an Africa-focused oil and gas company that he founded in 2013. Under his leadership, Delonex has delivered low-cost drilling and seismic operations along with leading social and environmental performance in sub-Saharan Africa. In Chad, the company has achieved material exploration success and discovered substantial oil resources. Delonex has also delivered exploration campaigns in Ethiopia and Kenya where Delonex operates Block 12A with Tullow as a non-operating partner.
Prior to establishing Delonex, Rahul served as Managing Director and CEO of Cairn India from its IPO in 2006 until 2012. During Rahul's tenure, Cairn India delivered operated production of over 200,000 barrels of oil per day with operating costs of less than $5 per barrel of oil. Cairn India also successfully delivered over $5 billion of development projects including the world's longest heated pipeline at a finding and development cost of less than $5 per barrel of oil.
Rahul started his career as a Petroleum Engineer, before moving into investment banking where he led teams at Morgan Stanley and Merrill Lynch, advising major oil & gas companies on merger and acquisition and capital market related issues. Rahul is a UK citizen and was educated at the Indian Institute of Technology (BTech), the University of Texas (MSc) and the Wharton School (MBA).
Dorothy Thompson, Executive Chair of Tullow Oil Plc, commented today:
"I am delighted to welcome Rahul to Tullow and am very pleased that he has accepted the position of CEO. His oil & gas, financial and African experience combined with his record of strong leadership made him the stand-out candidate for the Board. I look forward to Rahul joining Tullow in July and working with him closely in the coming years."
Rahul Dhir, Chief Executive Officer-designate of Tullow Oil plc, also commented today:
"I am very excited at the opportunity to lead Tullow and re-establish it as an iconic company in our industry. The company has high-quality assets and great people. It also has a unique position in Africa, built on a proven track record of responsible operations, strong relationships and a commitment to sustainability. I am looking forward to working with the team and the Board to re-build an exceptional business."
This announcement includes inside information as defined in Article 7 of the Market Abuse Regulation No. 596/2014 and is being released on behalf of Tullow by Adam Holland, Company Secretary.
Posts: 262
Opinion: No Opinion
Posted: February 17, 2020
Tullow Oil plc (Tullow) announces that the Marina-1 exploration well, drilled on Z-38 licence offshore Peru, has reached Total Depth and has not encountered significant hydrocarbons. The well tested the La Cruz and Mal Pelo formations where minor gas shows were encountered however there were no indications of hydrocarbons in the primary targets in the Tumbes formation.
The Stena Forth drillship drilled the Marina-1 well to a Total Depth of 3,022 metres in 362 metres of water and the well will now be plugged and abandoned.
Karoon Energy is the operator of the Marina-1 well through its wholly owned subsidiary, KEI (Peru Z‐38) Sucursal del Peru and has a 40% operating equity interest. Tullow Oil holds a 35% interest with Pitkin Petroleum holding the remaining 25%.
Mark MacFarlane, Chief Operating Officer, commented today:
“This is the first ever well in the deep-water section of the under-explored Tumbes basin. We will now integrate the important well information with the seismic data that we are currently reprocessing and update our prospect inventory for blocks Z-38 and Z-64. Tullow is building an extensive exploration position in Peru and, while this result is not what we had hoped for, we remain positive about Peru’s wider offshore exploration potential.”
Posts: 262
Opinion: No Opinion
Posted: February 12, 2020
ABERDEEN, Scotland (Reuters) - Total Chief Patrick Pouyanne dismissed the idea it might buy its partner in East Africa and Guyana, Tullow Oil, whose share price slumped to 19-year lows in December over a string of bad news, stoking takeover speculation.
Total is a partner in all growth markets for Tullow Oil whose market capitalisation shrank to around 633 million pounds as of Wednesday from 3.28 billion pounds in September. It is slashing its workforce and restructuring its portfolio.
Amid industry speculation about a potential Tullow takeover target, Pouyanne told Reuters when asked whether Total might buy Tullow: "Stop dreaming... No".
As of late 2019, Tullow was saddled with $2.8 billion in debt, a hangover from the last oil price crash which saw Brent crude futures plummet to below $30 a barrel in 2016.
High debts can make buying assets a more attractive option than a corporate sale.
Offshore Guyana, Tullow owns 60% and Total 25% of the Orinduik block, estimated to hold around 5.1 billion barrels of oil equivalent. Total also holds 25% in the Kanuku block, adjacent to Orinduik, in which Tullow holds 37.5%.
While two of Tullow's previous wells in Orinduik produced heavy oil, calling into question the quality of the reservoir, other wells targeting deeper layers have produced lighter oil - reviving hopes for the commerciability of wells targeting the so-called Upper Cretaceous.
Pouyanne said he expected two or three wells to be drilled offshore Guyana this year. Total, Tullow and their Orinduik partner Eco are due to meet this month and discuss next steps for their drilling off Guyana.
In Uganda and Kenya, Total and Tullow have partnered to bring the countries' first oil projects onstream, but both projects have hit snags.
Onshore Uganda, a deal for Tullow to sell a chunk of its stake to Total, fell through in August due to tax disputes with the government.
Uganda's government said in December it had settled the dispute with the companies, but they have not yet confirmed any such deal.
Pouyanne told Reuters discussions were still ongoing, but that Tullow's "financial issues" must also be dealt with.
In Kenya, Tullow and Total aim to reduce their stakes with a joint sale that could see Tullow exit completely amid uncertainty over the project's launch, banking and industry sources said.
Tullow declined to comment.
Posts: 262
Opinion: Buy
Posted: August 30, 2019
I've bought my first tranche of Tullow Oil today at 204.9p
Posts: 262
Opinion: No Opinion
Posted: August 12, 2019
RNS Number : 6416I
Tullow Oil PLC
12 August 2019
News Release
THIS PRESS RELEASE CONTAINS INSIDE INFORMATION
Jethro-1 oil discovery
12 August 2019 - Tullow Oil plc (Tullow) announces the results of its Jethro-1 exploration well, drilled on the Orinduik licence offshore Guyana by its wholly owned subsidiary Tullow Guyana B.V.
The Jethro-1 was drilled by the Stena Forth drillship to a Total Depth of 4,400m metres in approximately 1,350 metres of water. Evaluation of logging data confirms that Jethro-1 is the first discovery on the Orinduik licence and comprises high quality oil bearing sandstone reservoirs of Lower Tertiary age. The well encountered 55m of net oil pay which supports a recoverable oil resource estimate which exceeds Tullow's pre-drill forecast. Tullow will now evaluate the data from the Jethro discovery and determine appropriate appraisal activity.
This discovery significantly de-risks other Tertiary age prospects on the Orinduik licence, including the shallower Upper Tertiary Joe prospect which will commence drilling later this month following the conclusion of operations at the Jethro-1 well. The non-operated Carapa 1 well will be drilled, later this year, on the adjacent Kanuku licence to test the Cretaceous oil play.
Tullow Guyana B.V. is the operator of the Orinduik block with a 60% stake. Total E&P Guyana B.V. holds 25% with the remaining 15% being held by Eco(Atlantic) Guyana Inc.
Paul McDade, Chief Executive Officer, commented today:
"This substantial and high value oil discovery in Guyana is an outcome of the significant technical and commercial focus which has underpinned the reset of our exploration portfolio. It is an excellent start to our drilling campaign in the highly prolific Guyana oil province. We look forward to drilling both the Joe and Carapa prospects in our 2019 drilling campaign and the material follow-up exploration potential in both the Orinduik and Kanuku licences."
Tullow will host a conference call at 9:00am UK time today to talk about the result with accompanying slides that will be available to download from our website www.tullowoil.com/reports. See call details below.
FOR FURTHER INFORMATION CONTACT:
Tullow Oil plc
(London)
(+44 20 3249 9000)
Julia Ross
Nicola Rogers
George Cazenove
Murray Consultants
(Dublin)
(+353 1 498 0300)
Pat Walsh
Joe Heron
Conference call details:
Conference ID: 4766305
From the UK: 0800 3767922
Outside of the UK: +44 (0) 2071 928000
Posts: 262
Opinion: No Opinion
Posted: May 6, 2019
Tullow oil Tweeted today, "Tullow Oil plc, Peru: Z-64 (100% Tullow Operated), adjacent to Z-38, holds a proven but under-exploited offshore basin with active seeps. We will be reprocessing the existing 3D and 2D seismic data in the initial phase, and also have plans to acquire additional seismic."
Posts: 20
Opinion: Buy
Posted: February 1, 2019
An introduction to 'Project Oil Kenya', the Tullow operated project to develop the significant oil discoveries made in the South Lokichar Basin. #projectoilkenya
https://youtu.be/CQ0xUchcwdc
Posts: 262
Opinion: Buy
Posted: January 16, 2019
Tullow Oil's 2019 output to rise as Ghana production ramps up
* Uganda farm-out's $208 mln inflow slips into 2019
* 2018 free cash flow at $410 mln
* Net debt at $3.1 bln
LONDON, Jan 16 (Reuters) - Tullow Oil's production is set to grow to between 94,000 and 102,000 barrel of oil equivalent per day (boed) this year, it said in a trading update on Wednesday, from 90,000 boed last year as it increases output in Ghana.
The Africa-focused company had previously expected around $208 million from selling part of its stake in Ugandan oilfields to come in before the end of 2018, but the timeframe slipped which weighed on free cash flow and debt reduction.
Free cash flow stood at $410 million. It had previously said its cash flow for 2018 could reach as much as $700 million. Crude oil slumped by more than a third in the second half of 2018 to below $50 a barrel.
Tullow's net debt at the end of last year stood at $3.1 billion, higher than the $2.8 billion forecast.
Uganda's energy minister said on Dec. 20 that she had given Tullow conditional approval to sell part of its stake in Ugandan oilfields to France's Total and China's CNOOC but only after $167 million of tax on the deal is paid, a view Tullow disagrees with.
Tullow said in November it would return to paying dividends, which it suspended in 2015 due to the oil price crash, and expects to pay out at least $100 million from 2019 with an option for a special dividend for this year.
Tullow said it had hedged around 55,700 barrels of oil per day (bopd) at a floor of $56.24 a barrel this year.
Its 2020 hedging position locked in 25,000 bopd with an average floor price protected of $59.00 a barrel.
Posts: 18
Opinion: Sell
Posted: May 22, 2018
TULLOW OIL: The production vessel at Tullow's flagship Jubilee oilfield off Ghana's west coast will shut down next week for 21 days while it undergoes repairs, the country's power utilities said on Monday.
Posts: 262
Opinion: No Opinion
Posted: February 7, 2018
RNS Number : 1466E
Tullow Oil PLC
07 February 2018
Tullow Oil plc - 2017 Full Year Results
$1.7 billion sales revenue; $543 million free cash flow; 2.6x gearing ratio
Kenya's potential confirmed; proposed First Oil in early 2020s
Exploration portfolio fully re-set: multiple high impact campaigns over next three years
7 February 2018 - Tullow Oil plc (Tullow), the independent oil and gas exploration and production group, announces its full year results for the year ended 31 December 2017. Details of a presentation in London, webcast and conference calls are available on the last page of this announcement or visit the Group's website www.tullowoil.com.
COMMENTING TODAY, PAUL McDADE, CHIEF EXECUTIVE OFFICER, SAID:
"I am pleased to report that Tullow made excellent progress in 2017 as demonstrated by our substantial free cash flow generation and significantly reduced gearing. Strong production and disciplined cost management has allowed us to continue to both reduce debt and invest in our high-return production assets in Ghana. The assessment of the results from our appraisal campaign in Kenya also fully supports progress towards a major development of the South Lokichar Basin. As we continue to retain a keen focus on the financial discipline that has served us so well, we are now also looking to grow the value of our business both through exploration, following a full re-set of the portfolio, and through other opportunities that the recovery in the sector will present."
2017 FULL YEAR RESULTS SUMMARY
· Revenue of $1.7 billion plus lost production insurance proceeds of $162 million; gross profit of $815 million; post tax loss of $189 million after write-offs and non-cash impairments; free cash flow of $543 million
· $2.5 billion RBL re-financed in November 2017; year-end 2017 net debt of $3.5 billion with facility headroom including free cash of $1.1 billion; net debt to adjusted EBITDAX gearing ratio of 2.6x
· 2017 capex of $225 million; 2018 capex forecast of $460 million (excluding Uganda expenditure of $110 million which will be repaid following completion of the Uganda farm-down)
· West Africa 2017 net working interest oil production, including production-equivalent insurance payments, averaged 89,100 bopd; 2018 production is expected to average between 82,000 and 90,000 bopd
· Incremental drilling programme due to start in February 2018; this additional well capacity combined with current strong production from both Jubilee and TEN fields will maximise and sustain production in the coming years
· Kenya resources assessment completed: 240 - 560 - 1,230 mmbo (1C-2C-3C) contingent recoverable resources from an overall discovered STOIIP of up to 4 billion barrels. Phased development is planned with FID in 2019 and First Oil in 2021/22
· Uganda deal completion expected in H1 2018; JV Partners working towards FID around mid-year
· Exploration portfolio now reset through disposals, farm-downs and the addition of significant new positions in Côte d'Ivoire and Peru. Multiple high impact exploration campaigns planned over next three years, starting with the high-impact Cormorant well in Namibia in H2 2018
Full RNS can be read, here.
http://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/TLW/13524038.html
Posts: 262
Opinion: No Opinion
Posted: November 29, 2017
RNS Number : 7775X
Tullow Oil PLC
29 November 2017
News Release
Tullow secures US$2.5 billion debt refinancing
29 November 2017 - Tullow Oil plc (Tullow) is pleased to announce that it has completed the refinancing of US$2.5 billion of Reserves Based Lending ("RBL") credit facilities.
The US$2.5 billion of credit facilities are split between a commercial bank facility of US$2.4 billion and an IFC facility of US$100 million. The fully committed facilities are revolving with a three-year grace period and final maturity of November 2024.
The transaction, which was formally launched in early October following the resolution of the Ghana - Cote d'Ivoire border dispute, was materially over-subscribed and extends the maturity of the Group's existing RBL credit facilities. Tullow has also decided to reduce the commitments of its Revolving Corporate Credit Facility to US$600 million from US$800 million, ahead of the scheduled amortisation in January 2018.
Following the refinancing of the RBL credit facilities and the reduction of the Revolving Corporate Credit Facility, Tullow has total headroom including free cash of US$0.9 billion with no material near-term debt maturities.
Les Wood, Chief Financial Officer, commented today:
"The refinancing of our RBL credit facility was a key objective for 2017 and we are very pleased to have completed this process in line with stated guidance and ahead of our year-end target. The success of this transaction clearly demonstrates the high quality of the Group's assets, our ability to generate free cash flow and the strength of our long-standing banking relationships. Following this refinancing, we have no material near-term debt maturities and will enter 2018 in a strong financial position."
Posts: 262
Opinion: No Opinion
Posted: November 8, 2017
RNS Number : 8486V
Tullow Oil PLC
08 November 2017
Tullow Oil plc - November Trading Update
2017 oil production forecast revised upwards to 85-89,000 bopd
Full year free cash flow forecast of c.$0.4 billion
Jubilee and TEN plans approved; drilling to commence in early 2018
8 November 2017 - Tullow Oil plc (Tullow) issues the following Trading Update for the period 27 July to 8 November 2017. The Group will publish a Trading Statement and Operational Update on 10 January 2018. Full Year Results for 2017 will be announced on 7 February 2018.
Highlights
· Full year 2017 West Africa net oil production guidance, including production-equivalent insurance payments, revised upwards to 85-89,000 bopd (from 78-85,000 bopd), following strong production performance from both TEN and Jubilee.
· TEN FPSO commissioning completed; 2017 gross production now expected to exceed guidance of 50,000 bopd following higher rates in the second half of the year; final ITLOS tribunal decision results in no adverse impact to the TEN fields and allows development drilling to resume in early 2018.
· Greater Jubilee Full Field Development Plan approval received from the Government of Ghana - drilling to commence in 2018; Jubilee turret remediation work optimised and now planned for 2018 with seven-to-nine weeks of total shut-down.
· Uganda farm-down submitted to the Government for approval following signature of pre-emption documentation; deal completion expected in the first half of 2018. Working towards FID in the first half of 2018, with FEED and ESIAs for upstream and pipeline progressing in line with schedule.
· South Lokichar Exploration and Appraisal drilling campaign now concluded, results being evaluated and incorporated in the development plans. Early Oil Pilot Scheme (EOPS) is now expected to commence early in 2018.
· Araku-1 wildcat well drilled in Block 54 in Suriname; no significant reservoir quality rocks encountered, but presence of gas condensate de-risks deeper plays for future possible exploration.
· 2017 Capex guidance reduced to c.$0.3 billion; free cash flow of around $0.4 billion forecast for 2017; Net debt at 31 October 2017 reduced to $3.6 billion. The RBL re-financing is on schedule to complete before year-end.
PAUL MCDADE, CHIEF EXECUTIVE OFFICER, TULLOW OIL PLC, COMMENTED TODAY:
"I am pleased to report that Tullow continues to make good operational and financial progress. The business is generating free cash flow which is enabling us to continue to reduce our debt. We have upgraded our oil production forecasts for West Africa following strong production at both Jubilee and TEN. In East Africa, both our projects are making steady progress towards Final Investment Decisions with our Kenyan business beginning the important shift from exploration and appraisal to development. With financial discipline and efficiency embedded across the Group, and with market conditions showing some early signs of improving, Tullow is well placed to benefit both from targeted investment in our diverse, low-cost portfolio and the opportunities that this point in the cycle presents."
Operational Update
GROUP PRODUCTION
Tullow's West Africa 2017 net oil production forecast, including production-equivalent insurance payments, has been revised upwards to 85-89,000 bopd (from 78-85,000 bopd), due to strong production performance from both TEN and Jubilee.
Gas production from the European portfolio is performing in line with guidance which remains unchanged at 5,500 to 6,000 boepd for the full year. Production will be adjusted to reflect the sale of the Group's entire Netherlands portfolio to Hague and London Oil plc (HALO) once the deal completes which is expected later this month.
WEST AFRICA
Ghana
Jubilee
The Jubilee Turret Remediation Project continues to progress well and during the period, the focus has been on optimising the remaining work programme and schedule. As a result, the turret bearing stabilisation works will now take place in the first quarter of 2018 and are expected to require shut-downs totalling approximately four-to-six weeks (down from five-to-eight weeks as previously guided). The next phase to rotate the FPSO to its permanent heading and to carry out the final spread-mooring will take place around the end of 2018 and is expected to require a shut-down of approximately three weeks. Tullow's corporate Business Interruption insurance is expected to offset the loss of revenue associated with these shut-down periods. Work is also continuing on the plan for the installation of a deep-water offloading system which would take place in 2019 and result in minimal interruption to production.
The combination of deferring the turret bearing stabilisation shutdowns into 2018 and good performance from the Jubilee field in the second half of 2017 means that full year gross production guidance from Jubilee has been increased to around 89,000 bopd (net: 31,600 bopd). Tullow's corporate Business Interruption insurance is expected to reimburse around 6,800 bopd of net production-equivalent insurance payments. Therefore, full year net production guidance from Jubilee, including production-equivalent insurance payments, has been increased to 38,400 bopd.
In October 2017, the Government of Ghana approved the Greater Jubilee Full Field Development (GJFFD) Plan which has been designed to develop additional commercial reserves and extend the field production profile. Approval of this plan permits infill drilling to commence on the Jubilee field and subsequent development of the Mahogany and Teak fields.
TEN
The TEN fields have performed well in the second half of 2017 and full year gross production guidance is now expected to exceed original guidance of 50,000 bopd (net: 23,600 bopd). Final commissioning of the FPSO has now been completed and with continued optimisation of production and water injection, the field performed well and has been regularly producing over 60,000 bopd during the period.
On 23 September 2017, the International Tribunal for the Law of the Sea (ITLOS) made its decision with regard to the maritime boundary dispute between Ghana and Côte d'Ivoire. The new maritime boundary, as determined by the tribunal, does not affect the TEN fields and Tullow has received confirmation from the Government of Ghana that the moratorium on drilling has now been lifted.
Ghana drilling in 2018
Following the ITLOS Tribunal decision and approval of the GJFFD Plan, Tullow is in the final stages of securing a rig for drilling on both the TEN and Jubilee fields in 2018. Work is ongoing on the sequence of the drilling campaign to optimise output from both the Jubilee and TEN field with the first well in the schedule expected to be in the Ntomme area of the TEN fields with drilling expected to commence in early 2018.
Non-operated Portfolio
The West Africa non-operated portfolio has been performing in line with expectations and production is expected to average around 23,000 bopd net in 2017.
Full year gas production from Europe is expected to average around 5,800 boepd, in line with guidance. The sale of Tullow's entire Netherlands portfolio to HALO is expected to complete later this month. Tullow will adjust its full year European production accordingly at the year end to reflect this sale.
EAST AFRICA
Kenya
In Kenya, the current phase of exploration and appraisal drilling in the South Lokichar Basin has been concluded and the focus is now on the Early Oil Pilot Scheme (EOPS) and the development of the discovered resources.
Successful exploration wells drilled in the programme were the Erut-1 well that tested and proved the northern extent of the basin and the Emekuya-1 well that further de-risked the Greater Etom structure and the northern area of the basin. The two remaining exploration wells drilled included the Etiir-1 well, which although dry, helped to understand the westerly extent of the Greater Etom Structure, and the Ekales-3 well which tested an undrilled fault block adjacent to the Ekales field. While reservoir and oil shows were encountered, the well was deemed non-commercial.
Appraisal drilling has also been a key focus of the programme in 2017. Appraisal wells were drilled at Ngamia-10 and 11, Amosing-6 and 7 and Etom-3 and all the wells have improved the definition of the limits of their respective fields. The final well in the programme was the Amosing-7 appraisal well and the Marriott-46 rig has now been demobilised.
The Auwerwer and Lokone reservoirs in the Etom-2 well were tested utilising artificial lift and flowed at 752 bopd and 580 bopd respectively which was lower than anticipated. As a result, further technical work will be undertaken to assess how representative the tests may have been and identify potential options to increase flow rates from the Etom field.
Activity will now move to focus on collecting further dynamic data from the fields. As part of EOPS extended production, water injection testing and a waterflood pilot test utilising the Ngamia-11 well are planned for the first half of 2018. Produced oil will initially be stored, until all work is completed and necessary consents and approvals granted for the transfer of crude oil to Mombasa by road.
Tullow is now reviewing all the data from the South Lokichar basin and in the first quarter of 2018 intends to give its assessment of Contingent Resources and plans for developing the basin.
A Joint Development Agreement (JDA), setting out a structure for the Government of Kenya and the Kenya Joint Venture Partners to progress the development of the export pipeline, was signed on 25 October 2017. The JDA allows important studies to commence such as FEED, Environmental and Social Impact Assessments (ESIA), as well as studies on pipeline financing and ownership. Upstream FEED and ESIAs are expected to commence in the first quarter of 2018.
Uganda
Tullow's farm-down in Uganda continues to progress with the signature of the pre-emption documents by the Joint Venture Partners. The Joint Venture Partners have officially notified the Government of Uganda, seeking its approval of the transaction. Tullow now anticipates that the farm-down with Total and CNOOC will complete in the first half of next year with cash payment on completion and payment of deferred consideration for the pre-completion period (including the whole of 2017) being received in 2018. The Joint Venture partners are working towards reaching FID in the first half of 2018; at which point Tullow's second cash instalment from the farm down will be received. In line with its post-transaction status, Tullow has been reducing its footprint in Uganda and is preparing for a non-operated presence only.
Operational activity is continuing as planned, with FEED and ESIAs for both the upstream and pipeline progressing in line with the FID schedule. Discussions on the pipeline project continue with both Governments supporting progress on the key commercial and transportation agreements. Commitment to the pipeline project was marked by both the Ugandan and Tanzanian Governments in August when a foundation stone was laid by the Presidents of each country at the Tanga Port in Tanzania. Two further ceremonies are planned for this month where a cross-border stone will be laid at the Uganda-Tanzania border and a foundation stone will be laid in Hoima, Uganda.
NEW VENTURES
South America
In October, the Araku-1 exploration well in Suriname was drilled to a total depth of 2,685 metres and no significant reservoir quality rocks were encountered. The well has been plugged and abandoned. Logging and sampling proved the presence of gas condensate, which in combination with high quality 3D seismic data, has de-risked deeper plays which offer significant future exploration potential in the Group's acreage. The well was drilled safely and under budget with a net cost to Tullow of c.$11 million.
In August, Tullow completed the farmout of a 20% equity in the Block 47 license offshore Suriname to Ratio Petroleum.
3D seismic acquisition in Guyana concluded in September. Processing of data acquired is in its early stages to mature and rank identified prospects for future potential drilling.
In Jamaica, Tullow entered into the next phase of the Walton Mourant license in October 2017 and will acquire a 2,100 sq km 3D survey in 2018.
Africa
In October 2017, Tullow announced that it had signed four new onshore licences (CI 518, CI 519, CI 301 and CI 302) in Côte d'Ivoire. The licences cover 5,035 sq km and a full tensor gradiometry gravity survey will begin in 2018.
In Mauritania, a 3D survey in Block C3 to cover new shallow water plays began in September 2017 and has now concluded. Tullow will also relinquish its interest in Block C-10 at the end of November. The Partnership are exiting at the end of the second exploration period as insufficient commercial justification could be made to enter into a third phase of the licence.
In Zambia, a 20,000 sq km full tensor gradiometry gravity survey and passive seismic survey to cover frontier Tertiary age rift basins finished in October 2017. The data from all the surveys is now being assessed.
In Namibia, Tullow completed the farmout of a 30% interest in the PEL37 license to ONGC Videsh in October.
Financial update
Tullow formally commenced the re-financing of its Reserves Based Lending facility in October and is on schedule to complete the process before the end of the year. At 31 October 2017, Tullow had net debt of $3.6 billion, down from $3.8 billion at the Half Year, and unutilised debt capacity and free cash of approximately $1.2 billion.
Forecast capital expenditure for the year has reduced to approximately $0.3 billion (net of accrual reversals) following a reduction of approximately $60 million made across the Group's East African assets. This Group forecast includes expenditure of approximately $65 million in Uganda which will be reimbursed once the farm-down completes next year.
Strong production and higher oil prices for much of the second half of the year continues to positively impact cash flow generation, and for the Full Year 2017, the Group expects to generate around $0.4 billion of free cash flow.